FIVE-YEAR CAPITAL PROGRAM AND OPERATING FORECAST

Transcription

1 FIVE-YEAR CAPITAL PROGRAM AND OPERATING FORECAST FY 2010 FY 2014 Adopted June 17, 2009 Five-Year Capital Program and Operating June 2009

2 Valley Metro Rail, Inc. Phoenix, Arizona Five-Year Capital Program and Operating Forecast FY 2010 through FY 2014 (July 1, 2009 through June 30, 2014) Board of Directors Chairman Councilman Tom Simplot, Phoenix Mayor Bob Barrett, Peoria Mayor Boyd Dunn, Chandler Mayor Hugh Hallman, Tempe Mayor Scott Smith, Mesa Mayor Elaine Scruggs, Glendale Executive Management Team Richard J. Simonetta, Chief Executive Officer Brian Buchanan, Design and Construction Director Larry Engleman, Safety, Security, and Quality Assurance Director John Farry, Community Relations Director Wulf Grote, Project Development Director Jay Harper, Operations and Maintenance Director Mike Ladino, General Counsel John McCormack, Finance and Administration Director Five-Year Capital Program and Operating i June 2009

3 Table of Contents Organization... 1 Vision and Mission... 2 Services... 3 Five-Year Budget Summary... 5 FY 2009 Accomplishments... 8 Annual Goals and Objectives... 9 Five-Year Capital Program All Capital Projects CP/EV LRT Project Northwest Extension Project Future High Capacity Transit Projects Five-Year Operating Forecast Uses of Funds Sources of Funds CP/EV Operations & Maintenance Assumptions Operations & Maintenance Cost Estimate Projected Ridership & Revenues Project Development Planning Support Five-Year Staffing Plan Appendix A - Budget Process Appendix B - Listing of CNPAs Appendix C - Glossary of Terms and Acronyms Five-Year Capital Program and Operating ii June 2009

4 ORGANIZATION Valley Metro Rail, Inc. () is a public non-profit corporation whose members are the cities of Chandler, Glendale, Mesa, Peoria, Phoenix, and Tempe. s mission is to manage the design, construction, and operation of the Light Rail Transit (LRT) System within the Metropolitan Area. The Board of Directors includes the mayors of the member cities or their designated representatives. The Board of Directors establishes overall policies for management and administration of the LRT System, provides oversight over the design, construction and operation of light rail, and oversees the receipt and disbursement of funds and grants from federal, state, local, and other funding sources. The Rail Chief Executive Officer (CEO) is responsible for the day-to-day management of the organization. The CEO plans, coordinates, and directs the activities of the Management Staff in carrying out the organization s responsibilities. The Management Staff includes a limited number of core agency employees, augmented by consultant personnel with specialized expertise and experience in light rail planning, design, construction, and operations on a project-by-project basis. The following chart depicts the policy organization for Valley Metro Rail and the relationships to key stakeholders. Five-Year Capital Program and Operating 1 June 2009

5 VISION AND MISSION Vision: Mission: will be recognized as a trusted and respected community partner and visionary leader that provides a premier regional rail transit system with a commitment to excellence and safety, which provides value, enhances quality of life and is a point of pride for our community. provides a premier regional rail system that enhances mobility and strengthens the viability of our community. Five-Year Capital Program and Operating 2 June 2009

6 Five-Year Organizational Goals: Operate a safe, efficient, customer-oriented, reliable system. Plan, design, and construct the rail/high capacity transit element of the Regional Transportation Plan. Strengthen public confidence in as a premier regional rail system. Maintain sound relationships with public and private stakeholders in the system. SERVICES was formed to plan, design, construct, and operate the Light Rail Transit System. The Approved Light Rail Alignment (the initial 20-mile segment) was completed on time and commenced serving passengers in Phoenix, Tempe, and Mesa in December An additional 37 miles of High Capacity Transit, to be funded by local taxes, Proposition 400 revenues, and Federal Funds, is planned for future years. See Future Projects for further information. Five-Year Capital Program and Operating 3 June 2009

7 Project Development: The proposed light rail/ high capacity transit system will include over 57 mile of high capacity transit service in four cities within the next 20 years. Before any specific transit corridor is initiated, MERO will study and configure the system to better understand how corridors connect, determine facility requirements, and define operating parameters. System planning is the first step in developing the high capacity transit. It is followed by the corridor planning for individual corridors. Once technologies and alignments are determined in each corridor, preliminary engineering is engaged. A key objective during project development is to define all aspects of each high capacity transit corridor project, identify the appropriate transit technology, the alignment, stations, park-and-rides, maintenance facilities, traction power substations, and bus interface. staff is committed to working closely with policy makers, public agencies, businesses, community stakeholders, utility companies to assure an early and complete understanding of their needs and issues, before design begins. is responsible to assure that adequate funding is in place to implement, maintain and operate the light rail program. staff works closely with federal, state, regional and local agencies that provide present and future funding for the light rail system., in coordination with all affected agencies, annually updates the LRT Life Cycle Program, which defines light rail projects, funding, and schedule. Finally, assists with light rail station area planning by actively engaging to support member cities efforts to facilitate Transit Oriented Development (TOD). Design & Construction Management: is responsible for the design and construction of regional rail transit system. Efforts include design for guideway, passenger stations, LRV traction power, signals and communications systems and maintenance facilities. coordinates right-of-way acquisitions and public and private utility relocations to make way for construction. Construction contract specifications are developed and competitive procurements executed. Construction is managed to meet planned budget and schedule requirements. Emphasis is placed on delivering a high quality product focused on meeting the long-term needs to operate and maintain systems for rail passenger services. Operations & Maintenance: is responsible for overseeing the day-to-day operations of the system with the ultimate goal of providing a safe, reliable and customer focused transit system. In December of 2008, revenue operations began and now provides comprehensive management of rail passenger services including safety, security, public information and marketing, risk management, fare collection, finance, transportation service delivery and LRT systems maintenance. is self-performing core systems maintenance including track, power, signals and communication systems. has contracted services for light rail vehicle operators, vehicle maintenance, and facilities maintenance. Five-Year Capital Program and Operating 4 June 2009

8 FIVE-YEAR BUDGET SUMMARY Uses of Funds: The high-level details of the overall operating and capital budget for Valley Metro Rail is attached as Table 1, Budget Summary. The cumulative uses of funds, FY 2010 through FY 2014, may be summarized as follows: LRT Operations & Maintenance 20.8% PTF Financing Costs 3.2% Agency Operating Budget 0.6% Project Development Planning 2.4% CP/EV LRT Project 1.8% Finance Costs 5.0% CNPA 0.1% 14 LRV's / Systemwide Imp. 2.1% Non-Prior Rights Utilities 2.2% Northwest Phase 2 0.6% I-10 West 8.3% Glendale 6.6% Tempe South 9.2% Central Mesa 12.4% Northwest Extension Phase % Chart 1 Uses of Capital & Operating Funds FY 2010 through FY 2014 Five-Year Capital Program and Operating 5 June 2009

9 Sources of Funds: The cumulative sources of funds, FY 2010 through FY 2014, may be summarized as follows (see Table 1, Five-Year Capital Program and Operating Forecast Summary): FTA Section % CMAQ / STP 7.5% Member Cities 10.9% MAG / RPTA 0.6% All Others 0.0% FTA Section % Regional PTF Revenue 2009 ADOT Forecast 31.9% LRT Fares 5.6% Rail PTF Reserves and Borrowing Funds 11.9% Chart 2 Sources of Capital & Operating Funds FY 2010 through FY 2014 Five-Year Capital Program and Operating 6 June 2009

10 Table 1 - Five-Year Capital Program and Operating Forecast Summary ($,000) FY 2010 through FY 2014 Pre-2010 * Inception to Date Cumulative USES OF FUNDS CP/EV LRT Project $ 1,283,950 $ 15,148 $ 709 $ - $ - $ - $ 1,299,807 $ 15,857 Finance Costs 66,586 24,738 20, ,318 45,732 CNPA 121,115 1, ,127 1, LRV's / Systemwide Imp. 40,050 2, ,424 59,448 19,398 Non-Prior Rights Utilities 77,713 10,616 9, ,874 20,161 Northwest Extension Phase 1 64,025 83,268 72,282 61,007 6, , ,970 Central Mesa ,695 20,641 27,052 56, , ,541 Tempe South ,468 12,269 18,773 45,835 83,283 83,283 Glendale ,821 38,070 59,890 59,890 I-10 West ,604 4,869 30,989 37,114 75,548 75,548 Northwest Phase ,825 3,760 5,586 5,586 PTF Financing Costs - 5,200 4,070 4,367 4,993 10,283 28,913 28,913 Subtotal - Capital 1,653, , , , , ,712 2,344, ,892 LRT Operations & Maintenance - 33,733 34,914 36,136 40,001 43, , ,193 Project Development Planning - 12,799 3,542 2,702 1,535 1,106 21,684 21,684 Agency Operating Budget ,015 1,049 4,987 4,987 Total Uses $ 1,653, , ,139 $ 143,362 $ 154,417 $ 253,277 $ 2,559,195 $ 905,756 SOURCES OF FUNDS Phoenix $ 754, ,860 $ 56,283 $ 19,018 $ (834) $ 855,037 $ 100,990 Tempe 201,902 (26,459) (9,263) 4,153 8,372 8, ,354 (14,547) Mesa 41,483 (7,231) (2,911) 425 1,613 1,667 35,047 (6,436) Glendale - 1,420 1, ,430 9,131 18,210 18,210 Chandler Peoria Scottsdale MAG / RPTA - 1,000 1,000 1,000 1,000 1,000 5,000 5,000 All Others 1, ,286 - Subtotal 998,718 (30,424) 16,297 62,778 35,583 19,766 1,102, ,000 - Regional PTF Revenue Forecast 182,808 50,526 53,046 57,020 61,584 66, , ,583 Rail PTF (Reserve) / Borrowing 18,713 29,106 21,897 (17,694) (1,737) 76, , ,683 - LRT Fares - 8,985 9,300 9,625 10,828 12,182 50,920 50,920 - FTA Section , ,800 54,000 11,331 31,000 61, , ,632 FTA Section CMAQ / STP 54,132 5,618 7,600 20,301 17,159 17, ,120 67, , ,368 61,600 31,632 48,159 78, , ,570 Total Sources $ 1,653, , ,140 $ 143,362 $ 154,417 $ 253,277 $ 2,559,195 $ 905,756 * "PRE 2010" Reports cumulative capital costs projected through 6/30/2009 Note: Cost and revenues reported on accrual basis. Negative Sources of Funds reflect reimbursements to Member Cities for federal grant funding and Regional PTF revenues forecasted to fund Regional Assets. Regional PTF Revenues are from the February 2009 ADOT revenue forecast. The Rail PTF (Reserve) / Borrowing represents forecasted annual reserve at FYE 2009 and future funding requirements in excess of the expected sales tax revenue Five-Year Capital Program and Operating 7 June 2009

11 FY 2009 ACCOMPLISHMENTS opened on time and within budget December 27, 2008 o Over 150,000 rides on opening weekend without incident o Additional 150,000 rides during free fare period leading up to revenue service date of January 1, rides exceed projections for First Quarter of revenue service o Projected average weekday rides 26,000 o Actual average weekday rides for the First Quarter 33,454 Saturday service is exceeding expectations o Projected average Saturday rides 20,800 o Actual average Saturday rides for the First Quarter 30,498 Central Phoenix/East Valley (CP/EV) total project construction safety exceeded industry standards: o 5.6 Million hours worked o Construction lost time rate 1.3 vs National Standard o Construction lost time rate 0.1 vs hrs/100 National Standard Implementation of a safety awareness campaign to ensure safety during the testing period and the implementation of revenue service that included: o Production and distribution of a driver safety video o Production of a safety advertising campaign in English and Spanish generating 37 million impressions o Conducted outreach and training events focused solely on accessibility and light rail safety for persons with disabilities Established Risk Management policies and procedures to prepare for passenger operations including establishment of Self Insurance Reserve Trust Fund Prepared and facilitated execution of agreements with Member Cities: o Master Funding Agreements, Security Agreements, Conduct Ordinances Successfully completed Procurement Systems Review with City of Phoenix / Federal Transit Administration (FTA) (begun in early 2007) Pursued and established advertising revenue potential with NBA (All-Star Game) Continued final design for the 3.2 mile Northwest Extension Light Rail Project with over the shoulder review by the Construction Manager at Risk firm Significant progress was made on Alternatives Analysis for three future high capacity transit corridors including Central Mesa, I-10 West and Tempe South Five-Year Capital Program and Operating 8 June 2009

12 o Received federal section 5339 grant funding commitments of $1.568 million to fund the AA studies and obtained a follow-up commitment for another $950,000 discretionary federal funds to assist with MAG and RPTA activities related to s AA studies Awards Received by : Best of the Best Transportation - Engineering News Record AMCA Public Service Award 2006 APWA AZ Chapter Public Works Project of the Year Associated Minority Contractor s of America (AMCA) - Project of the Year Award Associated Minority Contractors of America - Community Service Award - Employer of the Year 2008 Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada 2008 Dreamer - Best Project in Downtown Phoenix Area Award 2008 FTA/FHWA Transportation Planning Excellence Award (for Transportation and Land Use Integration) 2004 International Right of Way Association (IRWA) - TOP 10 North American Infrastructure Projects Southwest Contractor Awards Arizona Best of 2008 in Transportation Line Section 5 and Engineering Design Tempe Town Lake Bridge WTS - Innovation and Transportation Award WTS Employer of the Year Award 2005 and 2008 ANNUAL GOALS AND OBJECTIVES (FY 2010 THROUGH FY 2014) Project Development Division Goals: Complete environmental monitoring, analysis and reporting for the initial 20-mile LRT project. Five-Year Capital Program and Operating 9 June 2009

13 Resolve the proper location for a high capacity transit investment to serve Glendale and west Phoenix Establish a Light Rail/High Capacity Transit system configuration for high capacity transit corridors in the Regional Transportation Plan (RTP) Determine the Locally Preferred Alternative and receive Board approval for future high capacity transit corridors in the RTP o Central Mesa o I-10 West o Tempe South Implement an effective agency-wide Geographic Information System Work with FTA to develop a program agreement for funding of future corridor projects Actively participate in and provide management assistance for regional transit planning studies, such as the MAG Regional Transit Framework Study, MAG Commuter Rail studies, and RPTA BRT studies Support city efforts to encourage transit oriented development and work with cities to develop TOD opportunities Prepare planning studies for potential future transit corridors as requested by member agencies (e.g. Peoria, Scottsdale). Design & Construction Division Goals: Support operation of the initial 20 mile operating segment Closeout all contracts related to the CP/EV Project Begin and complete construction on the Northwest Extension utilizing the CM@R delivery method. Implement alternative delivery methods to construct future corridors. Develop and implement capital project cost estimating standards and 3 rd party plan review procedures. Five-Year Capital Program and Operating 10 June 2009

14 Operations & Maintenance Division Goals: Deliver rail operational service within budget Achieve or exceed LRV mean-time-between-failures objective. Adhere to FTA compliant Drug and Alcohol Testing Program for all O&M Employees. Scrutinize methods to achieve cost savings and efficiencies within O&M. Ensure compliance with Operation and Maintenance Agreements and update as necessary. Continue efforts to ensure seamless bus/rail service operations. Monitor key performance indicators which measure safety, efficiency and reliability of the System. Scrutinize contractors to ensure fiscal and performance compliance. Community Relations Division Goals: Implement marketing strategy and safety campaigns for continued light rail construction, vehicle testing, and revenue operations startup. Continue to foster relationships with the business and residential communities related to light rail construction, system testing, and revenue operations. Ensure cooperative relationships are maintained with member cities and regional stakeholders. Work effectively with the FTA and Congress to maximize federal funding for rail extensions. Maintain positive relationships with the media resulting in objective news coverage. Legal Services Division Goals: Maintain lawful, fair and cost-efficient procurement practices to support s passenger operations, future planning, corporate and construction needs. Five-Year Capital Program and Operating 11 June 2009

15 Provide on-going legal advice to Senior management in the areas of risk management, litigation avoidance, statutory compliance and corporate governance. Manage and fine-tune the Owner Controlled Insurance Program as s operational experience develops. Achieve full realization of the DBE or other applicable socio-economic programs as continues to grow and expand. Streamline the delivery of in-house legal services so as to reduce the overall cost to. Strengthen internal controls; respond promptly to audit oversight findings. Maintain compliance with FTA requirements and best practices in order to better position for future funding opportunities. Finance and Administration Division Goals and Objectives: Manage financial reporting and controls system to deliver CPEV LRT and Northwest Extension projects on-time and within budget. CPEV Close-out project objectives Continue reporting to meet FTA and Member City requirements. Provide support and promote prompt contract close-out Expedite Federal Grant receipts NW Extension project objectives Manage Project Change Control Process & Reporting Develop staffing cost controls Coordinate project funding with Phoenix and RPTA Bond Funding Develop annual budget and five-year capital and operating forecasts integrated with Member City objectives and funding, Transit Life Cycle Plan and Regional Transportation Plan. Manage all Financial aspects of Rail Operations Costs o Work Order cost system Manage accurate labor and material costs Maximize Warranty recoveries o Inventory Cost reporting o Contract control management Audit monthly billings Identify cost savings and initiate actions to reduce cost Five-Year Capital Program and Operating 12 June 2009

16 Manage Fare Revenue and Ridership accounting controls o Hold Contractors accountable to improve equipment and services o Develop written routines to improve cash controls o Fully implement DILAX ridership reporting system Maintain PCI compliance Complete NTD reports accurately and On-time Complete full Implementation of Sage accounting system to standardize financial reporting and enhance monthly reporting to Member Cities for Rail Operations, Agency Operating Costs and capital projects. Five-Year Capital Program and Operating 13 June 2009

17 FIVE-YEAR CAPITAL PROGRAM FY 2010 THROUGH FY 2014 Capital projects included in the five year program include: Central Phoenix / East Valley (CP/EV) the initial 20-mile spanning Phoenix, Tempe and Mesa Northwest Extension 5 mile alignment in Phoenix with 3.2 mile Phase I proceeding north and terminating in the vicinity of Dunlap Avenue and 25 th Avenue and Phase II continuing 1.8 miles north to vicinity of Metro Center. Future LRT Extensions: Central Mesa 2.7 mile alignment extending eastbound to downtown Mesa; Tempe South 2.0 mile alignment extending southward in the vicinity of Rural Road to the Superstition Freeway; Glendale Extension 5.0 mile alignment westward to downtown Glendale; I-10 West 11.0 mile alignment from downtown Phoenix westward to the vicinity of 79th Avenue. is currently in alternative analysis for additional high capacity transit corridors (extensions to CP/EV LRT), developing an overall systems configuration plan, and is also managing Concurrent Non-Project Activities (CNPA), in connection with the construction closeout of CP/EV LRT. Costs for the alternative analyses, systems studies and CNPA are part of the Proposed FY 2010 Operating and Capital Budget. The Capital Program report is a multiple year (five fiscal years) forecast of the capital projects managed by Valley Metro Rail. Costs and revenues are reported on an accrual basis. Actual cash flow impacts may lag pending receipt of contractor billings and receipt of federal funding. Five-Year Capital Program and Operating 14 June 2009

18 All Capital Projects - Uses of Funds: Valley Metro Rail currently has a number of transit projects in various stages of planning, design or construction. The overall uses of funds associated with these projects and activities are projected to be $2.3 billion through the five-year planning horizon. These uses of funds are summarized as follows: Inception through FY LRV's 2.5% Finance Costs 4.8% CNPA 5.2% NPR Utilities 4.2% NW Ext Phase %Central Mesa 4.8% Tempe South 3.6% Glendale 2.6% I-10 West 3.2% Systemwide Improvements 0.1% PTF Financing 1.2% NW Phase 2 0.2% CP/EV LRT Project 55.4% Chart 3 All Capital Project Uses of Funds Inception through FY 2014 Five-Year Capital Program and Operating 15 June 2009

19 All Capital Projects - Sources of Funds: Funding is derived from three primary sources: Member Cities Taxes and Bonds, Regional Sales Taxes (Public Transportation Fund), and Federal Grants. These sources of funds are summarized as follows (see also Table 2, Five-Year Capital Program / All Projects): Inception through FY 2014 Mesa 1.2% Glendale 0.6% All Others 0.1% Regional PTF 25.0% Tempe 6.3% Phoenix 32.4% CMAQ 5.2% FTA Sec % Chart 4 All Capital Projects Sources of Funds -- Inception through FY 2014 Five-Year Capital Program and Operating 16 June 2009

20 Table 2 - Five-Year Capital Program / All Projects ($,000) FY 2010 through FY 2014 Pre Total USES OF FUNDS CP/EV LRT Project 1,350,536 39,886 21, ,412,126 Northwest Extension Phase 1 64,025 83,268 72,282 61,007 6, ,995 Central Mesa ,695 20,641 27,052 56, ,541 Tempe South ,468 12,269 18,773 45,835 83,283 Glendale ,821 38,070 59,890 I-10 West ,604 4,869 30,989 37,114 75,548 Northwest Phase ,825 3,760 5,586 Subtotal 1,414, , ,752 98, , ,005 2,035, LRV's 40,050 1, ,897 57,583 CNPA 121,115 1, ,127 Non-Prior Rights Utilities 77,713 10,616 9, ,874 Systemwide Improvements ,865 PTF Financing Costs - 5,200 4,070 4,367 4,993 10,283 28,913 Total Capital Costs 1,653, , , , , ,712 2,344,331 SOURCES OF FUNDS Phoenix 754,048 (16,522) 7,705 39,366 (1,490) (22,667) 760,441 Tempe 201,902 (34,026) (17,076) (3,932) ,868 Mesa 41,483 (8,688) (4,415) (1,131) ,250 Glendale ,400 9,100 14,500 All Others 1, ,286 Subtotal 998,718 (59,235) (13,786) 34,304 3,910 (13,567) 950,344 PROJECTED PROPOSITION ,521 70,864 74,913 37,604 59, , ,167 PROJECTED REVENUES FTA 399, ,800 54,000 11,331 31,000 61, ,700 CMAQ 54,132 5,618 7,600 20,301 17,159 17, ,120 Subtotal 453, ,418 61,600 31,632 48,159 78, ,820 Total Revenues 1,653, , , , , ,712 2,344,331 Note: Negative sources of funds reflect reimbursements to Member Cities for the CPEV 20 Mile Initial Segment Capital Project. Sources of funding include federal grant proceeds and Prop 400 revenues forecasted to fund Regional Assets. Five-Year Capital Program and Operating 17 June 2009

21 CP/EV LRT Project: The Central Phoenix/East Valley Light Rail Transit (CP/EV LRT) project, as defined in the Full Funding Grant Agreement (FFGA), is a 20 mile LRT project that will connect north central Phoenix, Tempe, and Mesa. The project was identified as the Minimum Operable Segment of the Locally Preferred Alternative selected in the Central Phoenix/East Valley Major Investment Study completed in As the initial starter segment, the CP/EV LRT project extends from 19 th Avenue and Bethany Home Road in Phoenix to Main and Sycamore Road in Mesa. Phoenix, Tempe, and Mesa will share responsibility for funding the non-federal share of the capital costs and the ongoing operations and maintenance (O&M) costs of the project. Construction of the CP/EV LRT began in FY 2005, with revenue operation commencing in December The total capital costs of the CP/EV LRT project over the period in which funds would be received through the FFGA (FY 1999 to FY 2012) is $1.412 billion in year of expenditure dollars. Five-Year Capital Program and Operating 18 June 2009

22 CP/EV LRT Project - Uses of Funds: The total capital cost of the CP/EV LRT project over the FY 1999 to FY 2014 period is $1.412 billion in year of expenditure dollars. Capital costs planned for this project are summarized as follows: ($,000) Project Management 15.6% Transit Enhancements 0.4% Project Contingency 0.1% Project Finance Cost 8.0% Rolling Stock 8.4% Construct Transitway/Lines 29.9% Engineering 9.5% Right of Way 9.3% Signal & Communication Equipment 3.1% Electrification & Power Distribution 4.4% Support Equipment & Facilities 4.8% Stops & Terminals 6.6% Chart 5 -- CP/EV LRT Project Uses of Funds Inception through FY 2014 Five-Year Capital Program and Operating 19 June 2009

23 CP/EV LRT Project - Sources of Funds: In addition to Full Funding Grant Agreement federal funds and regional Public Transportation Funds, member cities provide funding for the light rail project through their annual or biennial budgets. Phoenix, Tempe, and Mesa will share the bulk of the responsibility for funding the non-federal share of capital costs. Capital revenues planned for this project are summarized as follows (see also Table 3 Five-Year Capital Budget / CP/EV LRT Project): ($,000) FTA 41.6% CMAQ 4.2% Phoenix 29.3% Proposition 400 Revenues 14.1% Mesa 1.5% Tempe 9.3% Chart 6 -- CP/EV LRT Project Sources of Funds Inception through FY 2014 Five-Year Capital Program and Operating 20 June 2009

24 Table 3 - Five-Year Capital Program / CP/EV LRT Project ($,000) FY 2010 through FY 2014 CP/EV LRT Project Pre TOTAL PROJECTED COSTS Capital Costs $ 1,283,950 $ 15,148 $ 709 $ - $ - $ - $ 1,299,807 CP/EV Financing Costs 66,586 24,738 20, ,318 Total Capital Costs $ 1,350,536 $ 39,886 $ 21,703 $ - $ - $ - $ 1,412,126 PROJECTED PAYMENTS Phoenix $ 558,724 $ (97,904) $ (45,558) $ (1,269) $ - $ - $ 413,992 Tempe 186,562 (34,026) (17,076) (3,932) ,528 Mesa 35,138 (8,688) (4,415) (1,131) ,905 Glendale Subtotal 780,424 (140,618) (67,049) (6,331) ,425 PROPOSITION ,913 47,086 34, ,751 FTA 399, ,800 54,000 6, ,200 CMAQ 54,132 5, ,750 Subtotal 570, ,504 88,752 6, ,701 Total Revenues $ 1,350,536 $ 39,886 $ 21,703 $ - $ - $ - $ 1,412,126 Note: Negative payments reflect reimbursements to Member Cities for the CPEV 20 Mile Initial Segment Capital Project. Sources of funding include federal grant proceeds and Prop 400 revenues forecasted to fund Regional Assets. Five-Year Capital Program and Operating 21 June 2009

25 Northwest Extension Project - The Northwest area is a major employment and activity center located in northwest Phoenix. The corridor continues to experience significant growth in population with an expected growth of 24 percent by Along with this growth, Vehicle Miles of Travel (VMT) is expected to increase by 21 percent. Traffic congestion and capacity deficiencies are expected to increase despite planned transportation improvements. Inadequate transit service has hampered access to this area and to other Valley destinations. A Locally Preferred Alternative (LPA) was adopted by the Phoenix City Council and Valley Metro Rail Board of Directors in On March 6, 2007, the Council approved the Northwest Corridor Light Rail Transit (LRT) Extension as a phased project; the first 3.2-mile phase, along 19 th Avenue from Montebello Avenue to Dunlap Avenue, will be funded entirely from locally funds. Phase I is scheduled to open in 2012, with the remainder of the 4.6 mile project to be completed when engineering is fully coordinated with ADOT s Interstate 17 widening project. Five-Year Capital Program and Operating 22 June 2009

26 Northwest Extension Project - Uses of Funds: The total capital cost of the Northwest Extension project over the FY 2005 to FY 2014 period is budgeted to be approximately $307 million, excluding financing costs ($,000) Non Prior Rights Utilites Relocation 6.4% Project Mgmt 10.9% Contingency 3.3% Preliminary Engineering /FEIS 0.5% Final Design 6.3% ROW Acquisition 17.5% Systems 10.6% Stations 9.2% Sitework 24.0% Guideway 11.3% Chart 7 -- Northwest Extension Project Uses of Funds Inception through FY 2014 Five-Year Capital Program and Operating 23 June 2009

27 Northwest Extension Project - Sources of Funds: The Northwest Corridor Study Project was included in the City of Phoenix s Transit Plan (Transit 2000) ballot initiative that was passed by voters, providing a 0.4% sales tax to fund the City s transit program. On March 6, 2007, the City of Phoenix Council approved the Northwest Corridor Light Rail Transit (LRT) Extension as a phased project; with the first 3.2-mile phase, along 19th Avenue from Montebello Avenue to Dunlap Avenue, to be funded entirely from locally funds. City of Phoenix funds and PTF regional tax funds will be required to complete the first 3.2 mile project phase. The sources of capital revenues planned for this project are summarized as follows (see also Table 4 Five-Year Capital Budget / Northwest Project): ($,000) Phoenix Water 11.9% Phoenix HURF 9.8% Proposition % Phoenix T 2000 Transit Tax 62.8% Chart 8 -- Northwest Project Sources of Funds Inception through FY 2014 Five-Year Capital Program and Operating 24 June 2009

28 Table 4 - Five-Year Capital Program / Northwest Extension Phase 1 Project ($,000) FY 2010 through FY 2014 Northwest Extension Pre TOTAL CAPITAL COSTS Project Costs $ 64,025 $ 83,268 $ 72,282 $ 61,007 $ 6,413 $ - $ 286,995 Non Prior Rights Utilites 3,552 6,466 9, ,563 Total Capital Costs $ 67,577 $ 89,734 $ 81,827 $ 61,007 $ 6,413 $ - $ 306,558 CAPITAL REVENUES FTA Section 5309 $ - $ - $ - $ - $ - $ - $ - Other Federal (CMAQ) Total Federal Phoenix T 2000 Transit Tax 57,130 65,898 48,815 44,288 (23,587) - 192,544 PTF Revenue 10,447 10,999 17,534 8, ,542 Phoenix Water - 12,837 15,478 8, ,472 Phoenix HURF ,000-30, Total Local 67,577 89,734 81,827 61,007 6, ,558 Total Capital Revenue $ 67,577 $ 89,734 $ 81,827 $ 61,007 $ 6,413 $ - $ 306,558 Five-Year Capital Program and Operating 25 June 2009

29 Future High Capacity Transit Projects: The Regional Transportation Plan (RTP), adopted by the Maricopa Association of Governments (MAG) and financed under the one-half cent sales tax extension, identifies 57 miles of major light rail/high capacity transit corridors to be implemented by Currently the 3.2 mile Phase I extension to serve the Northwest area is in final design and right of way acquisition. Under the plan additional service areas are identified; 2.7-miles east into downtown Mesa, 2-miles into south Tempe, 5-miles west into Glendale, 11-miles into west Phoenix and 12-miles into northeast Phoenix. Valley Metro Rail, Inc. () is the agency charged with planning, designing, building and operating the light rail transit (LRT) system in the area. The timing of the projects in the program is depicted on the following schedule shown below Planning will be completed on the South Tempe and Central Mesa corridors in FY The I-10 West corridor will complete the planning phase in FY The Glendale corridor will get underway with Alternatives Analysis beginning in FY 2009 and continue in FY Funding for future projects has two phases: 1.) Operating Budget Phase: Alternative Analysis and DEIS are funded from Federal Sec 5339 funds, Member City contributions, and PTF (See Project Development planning Support on page 32). 2.) Capital Budget Phase: After entry into Preliminary Engineering, costs are included in the capital budget and funded by Federal, regional, and local sources (See page 27). Five-Year Capital Program and Operating 26 June 2009

30 Future High Capacity Transit Projects - Uses of Funds: The following Future Project expenditures are currently scheduled to use capital funds during the planning horizon covered by this five-year capital budget (see also Table 5 Five-Year Capital Budget / Future LRT Extensions): ($,000) I-10 West 19.1% Northwest Phase 2 1.4% Fourteen LRV's 14.5% Systemwide Improvements 0.5% Glendale 15.1% Tempe South 21.0% Central Mesa 28.4% Chart 9 Future Projects Uses of Funds FY 2010 FY 2014 Five-Year Capital Program and Operating 27 June 2009

31 Future High Capacity Transit Projects - Sources of Funds: The sources of capital costs budgeted for these projects are summarized as follows (see also Table 5 Five- Year Capital Budget / Future Projects): ($,000) FTA % Glendale 3.7% Phoenix -3.0% CMAQ 15.7% Proposition % Chart Future Projects Sources of Funds FY 2010 FY 2014 Five-Year Capital Program and Operating 28 June 2009

32 Table 5 - Five-Year Capital Program / Future Projects ($,000) FY 2010 through FY 2014 USES OF FUNDS PRE TOTAL By Project Life Cycle Vehicle Acquisition $ 40,050 $ 1,636 $ - $ - $ - $ - $ 41,686 Preliminary Engineering - 2,836 14,767 20,134 54,636 46, ,290 Final Design ,263 14,797 18,065 37,126 ROW Acquisition ,201 15,382 16,857 43,440 Utility Relocation ,027 5,316 12,184 NPR Utility Relocations ,341 9,618 8,484 19,443 Construction , ,127 Testing & Startup $ 40,050 $ 5,065 $ 15,126 $ 38,166 $ 100,460 $ 197,429 $ 396,296 By Project Fourteen LRV's $ 40,050 $ 1,636 $ - $ - $ - $ 15,897 $ 57,583 Systemwide Improvements ,865 Central Mesa ,695 20,641 27,052 56, ,541 Tempe South ,468 12,269 18,773 45,835 83,283 Glendale ,821 38,070 59,890 I-10 West ,604 4,869 30,989 37,114 75,548 Northwest Phase ,825 3,760 5,586 $ 40,050 $ 5,065 $ 15,126 $ 38,166 $ 100,460 $ 197,429 $ 396,296 SOURCES OF FUNDS PRE TOTAL Local Glendale Sales Tax $ - $ - $ - $ - $ 5,400 $ 9,100 $ 14,500 Phoenix T ,050 1,636 (11,030) (11,810) (7,903) (22,667) (11,723) PTF - 3,429 18,556 23,334 45, , ,207 PTF Utilities ,341 9,618 8,484 19,443 Federal CMAQ - - 7,600 20,301 17,159 17,310 62,370 FTA ,000 31,000 61,500 97,500 FTA 5307 Subtotal - - 7,600 25,301 48,159 78, ,870 Total Sources $ 40,050 $ 5,065 $ 15,126 $ 38,166 $ 100,460 $ 197,429 $ 396,296 Note: Negative sources of funds reflect reimbursements to the City of Phoenix made in connection with the Fourteen LRVs. The source of funding is PTF revenues. Five-Year Capital Program and Operating 29 June 2009

33 FIVE-YEAR OPERATING FORECAST The Operations & Maintenance (O&M) costs for the CP/EV LRT Project were projected by to reflect current costs and with an escalation factor of 3.5% and anticipated staffing and administrative overhead requirements. A cost build-up approach was used to develop the O&M costs based on assumptions as to headways, running times, vehicle miles, staff requirements, power and utilities, materials and supplies, casualty and loss, police, and other contract services. System-wide and specific corridor LRT Project Development Planning activities are included in the operating budget. Once a project has been approved for preliminary engineering, the costs are thereafter capital in nature. Agency Operating costs include those costs not directly allocable to capital projects or to passenger operations. Included are costs of annual audit, federal and state legislative representation, memberships to transportation related organizations. Five-Year Operating - Uses of Funds: Operating costs planned for the FY 2010 through FY 2014 planning horizon may be summarized as follows (See Table 5, Five- Year Operating Budget): Project Development Planning Support 10.1% Agency Operating Budget 2.3% Operations & Maintenance 87.6% Chart 11 Uses of Funds -- Five-Year Operating Budget Five-Year Capital Program and Operating 30 June 2009

34 Five-Year Operating - Sources of Funds: Operating revenues planned for the FY 2010 through FY 2014 planning horizon may be summarized as follows (see also Table 5, Five-Year Operating Budget): Glendale 1.7% Mesa 3.6% Chandler 0.1% Peoria 0.1% Planning Funds - PTF 4.9% Scottsdale 0.1% FTA % RPTA/MAG/ CMAQ / STP 2.3% Fare Revenues 23.7% Tempe 18.8% Phoenix 44.0% Chart 12 Sources of Operating Funds FY 2010 thru FY 2014 Five-Year Capital Program and Operating 31 June 2009

35 Table 6 - Five-Year Operating Forecast ($,000) FY 2010 through FY TOTAL USES OF FUNDS Operations and Maintenance 33,733 34,914 36,136 40,001 43, ,193 Project Development Planning Support 12,799 3,542 2,702 1,535 1,106 21,684 Agency Operating Budget ,015 1,049 4,987 Total Uses 47,514 39,413 39,822 42,551 45, ,864 SOURCES OF FUNDS LRT Fares: Phoenix 6,027 6,238 6,457 7,557 8,780 35,059 Tempe 2,519 2,607 2,698 2,787 2,898 13,508 Mesa ,353 Subtotal Fares 8,985 9,300 9,625 10,828 12,182 50,920 Other Revenues Phoenix 17,184 18,155 16,917 20,507 21,833 94,597 Tempe 7,567 7,813 8,084 8,372 8,651 40,487 Mesa 1,457 1,504 1,556 1,613 1,667 7,797 Glendale 1,420 1, ,710 Chandler Peoria Scottsdale Subtotal Local Revenues 27,811 29,083 27,475 30,672 32, ,374 Capital Planning Funds - PTF 8, , ,620 MAG ,500 RPTA ,500 FTA CMAQ Total Sources 47,514 39,413 39,822 42,551 45, ,864 Five-Year Capital Program and Operating 32 June 2009

36 CP/EV Operations & Maintenance Cost Assumptions: Service Frequency FY 2010 Plan: Weekday trains will run with two cars at 10 minute intervals during peak hours and 15 to 30 minute intervals off peak. Weekends do not require peak service trains and will operate with one or two cars at 15 to 30 minute headways. Service headways and train lengths will be adjusted over time to accommodate growth and service patterns. Time of Day Weekday 4:40 am* to 6:00 am Weekday 6:00 am to 7:00 pm Sunday - Thursday 7:00 pm to 11:00 pm* Friday and Saturday 7:00 pm to 2:00 am* Saturday 5:00* am to 6:00 am Saturday 6:00 am to 7:00 pm Saturday 7:00 pm to 11:00 pm* Sunday 5:00 am* to 11:00 pm* *Indicates time that trains depart end of line stations for either first trip of the day or last trip of the day. Service Frequency 20 minutes 10 minutes 20 minutes 20 minutes 20 minutes 15 minutes 20 minutes 20 minutes Passenger Boardings: Over the course of the fiscal year 2010, average daily boardings are forecasted at 30,103 or 11.0 million rides for the year. Conservative growth ridership estimates predict fiscal year 2011 average boardings at 31,150 passengers per day; and fiscal year 2012 boardings at 32,250 passengers per day. In December 2012, with the opening of the Phase I Northwest Extension, average rides are anticipated to reach 38,300 per day. Rail Transportation Service Delivery: Rail Transportation is responsible for ensuring the overall safety and reliability of the system. This includes the Rail Control Center, Field Supervision and Train Operators. Rail Transportation will be responsible for monitoring the system on a 24/7 basis. LRV Maintenance: LRV Maintenance will be responsible for the preventive and corrective maintenance required to ensure a high level of LRV availability and reliability. In addition, each LRV will be cleaned on a daily basis. System Maintenance: Systems Maintenance is responsible for maintaining all systems and facilities, including: track, communications, signals, stations, traction power distribution and overhead centenary systems. Five-Year Capital Program and Operating 33 June 2009

37 Administration: Rail transportation and maintenance operations will be supported by administrative activities including public safety and security, marketing and customer service, legal and procurement, finance and accounting, risk management, and information systems. Fares: Effective in July 2009 the current Regional Fare Policy is changing as follows: Reduced - ADA Certified, Youth (6-18) and Seniors (age 65 and over) Five-Year Capital Program and Operating 34 June 2009

38 Table 7 - LRT with NW Extension Starting In December 2012 Operation and Maintenance Cost Estimate FY 2010 through FY 2014 First Full Year Costs Extended Cost FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Transportation Labor and Materials $ 8,411,598 Labor - Fare Inspection & Security 3,492,809 Transportation Consultant 75,000 Propulsion Power 2,294,520 Emergency Contingency (Bus Bridges, etc.) 196,000 Special Events Contingency 565,026 Transportation Total $ 15,034,953 $ 15,561,177 $ 16,105,818 $ 17,828,348 $ 19,347,756 Vehicle Maintenance Labor and Materials $ 5,697,132 Maintenance Other (200,000) Vehicle Maintenance Total $ 5,497,132 $ 5,689,532 $ 5,888,665 $ 6,518,463 $ 7,073,994 Systems and Facilities Maintenance Track/Station/Facility Maintenance $ 2,213,082 Traction Power System Maintenance 1,306,840 Signals/Communications/TVMs 1,160,655 Material/Supplies/Other Direct Costs 987,050 Utilities 1,052,700 Fare Collection Material & Security 445,586 Park & Ride Lots - Systems and Facilities Maintenance Total $ 7,165,913 $ 7,416,720 $ 7,676,305 $ 8,497,292 $ 9,221,467 Administration Property and General Liability Insurance $ 1,800,000 VMR Management 1,882,952 General & Administrative Costs 1,452,218 Contingency Reserve 900,000 Administration Total $ 6,035,170 $ 6,246,401 $ 6,465,025 $ 7,156,464 $ 7,766,369 $ 33,733,168 $ 34,913,829 $ 36,135,813 $ 40,000,566 $ 43,409,586 Five-Year Capital Program and Operating 35 June 2009

39 Table 8 - LRT with NW Extension Starting In December 2012 Projected Ridership and Revenues FY 2010 through FY 2014 Fiscal Year FY 2010 Annual Ridership / Fares FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Baseline Rides Fare Assumption Weekday * 6,552,000 $ 0.82 $ 5,372,640 $ 5,372,640 $ 5,560,682 $ 5,755,306 $ 6,474,720 $ 7,284,060 Saturday 1,081,600 $ 0.82 $ 886,912 $ 886,912 $ 917,954 $ 950,082 $ 1,068,843 $ 1,202,448 Sunday 676,000 $ 0.82 $ 554,320 $ 554,320 $ 573,721 $ 593,801 $ 668,027 $ 751,530 Total Baseline Rides 8,309,600 6,813,872 6,813,872 7,052,358 7,299,190 8,211,589 9,238,037 No change to rides, Average Fare based on new fare policy Additional weekday Rides - Exceeding FFGA Target Weekday 1,512,000 $ 0.82 $ 1,239,840 $ 1,239,840 $ 1,283,234 $ 1,328,148 $ 1,494,166 $ 1,680,937 Saturday - Sunday - Total Weekday Additional Rides 1,512,000 1,239,840 1,239,840 1,283,234 1,328,148 1,494,166 1,680,937 Rides down 14%, Average Fare based on new fare policy Additional Rides - Special Events Estimated Per Events Detail 1,135,911 $ 0.82 $ 931,447 $ 931,447 $ 964,048 $ 997,790 $ 1,122,513 $ 1,262,827 (Rides down 5%, Average Fare based on new fare policy) - Total Additional Rides for special events 1,135,911 $ 886,011 $ 931,447 $ 964,048 $ 997,790 $ 1,122,513 $ 1,262,827 TOTALS 10,957,511 $ 0.82 $ 8,939,723 $ 8,985,159 $ 9,299,640 $ 9,625,127 $ 10,828,268 $ 12,181, % 103.5% 112.5% 112.5% OPERATING REVENUES FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Fare Revenues Phoenix % $6,027,245 $ 6,238,198 $ 6,456,535 $ 7,556,788 $ 8,780,199 Tempe % $2,518,540 $ 2,606,689 $ 2,697,923 $ 2,787,136 $ 2,897,993 Mesa % $439,374 $ 454,752 $ 470,669 $ 484,344 $ 503,609 Total Fare Revenues $8,985,159 $9,299,640 $9,625,127 $10,828,268 $12,181,802 Fare Recovery Ratio 27% 27% 27% 27% 27% 28% Gross Operating Costs Phoenix $ 22,124,784 $ 22,899,151 $ 23,700,621 $ 27,130,143 $ 30,088,698 Tempe $ 9,780,669 $ 10,122,992 $ 10,477,297 $ 10,844,002 $ 11,223,542 Mesa $ 1,827,715 $ 1,891,685 $ 1,957,894 $ 2,026,420 $ 2,097,345 Total Operating Costs $33,733,168 $34,913,828 $36,135,812 $40,000,566 $43,409,586 Member City Funding Phoenix $ 16,097,539 $ 16,660,953 $ 17,244,086 $ 19,573,356 $ 21,308,499 Tempe $ 7,262,129 $ 7,516,303 $ 7,779,374 $ 8,056,866 $ 8,325,549 Mesa $ 1,388,341 $ 1,436,933 $ 1,487,225 $ 1,542,076 $ 1,593,736 Total Member City Funding $24,748,008 $25,614,189 $26,510,685 $29,172,298 $31,227,784 TOTAL OPERATING REVENUE $33,733,168 $34,913,828 $36,135,812 $40,000,566 $43,409,586 * Note - 6,552,000 annual weekday rides divided by 252 days per year equals 26,000 base riders each weekday Five-Year Capital Program and Operating 36 June 2009

40 Project Development Planning Support: Project development planning consists of the following subcategories of System Planning and Corridor Planning activities: Light rail/high capacity transit system planning. Alternatives analysis, environmental analysis, and conceptual engineering for future light rail/high capacity transit corridors. Developing and updating LRT design criteria, standards and specifications. Working with the Maricopa Association of Governments and the Regional Public Transportation Authority to participate in their regional transit planning studies and to update regional project programming documents. Support of Transit Oriented Development initiatives by Member Cities. Development of a comprehensive Geographic Information System (GIS) for the agency. Five-Year Capital Program and Operating 37 June 2009

41 The projected uses and sources of funds in connection with these activities are summarized as follows (note that any negative funding sources that may appear in the table below reflect reimbursement to Member Cities from other funding sources): ($,000) Five-Year Capital Program and Operating 38 June 2009

42 Five-Year Staffing Plan: Staffing levels are planned to optimize the appropriate relationship of internal staff versus contractor labor. Internal staffing provides a lower cost solution so long as project activities require full-time effort throughout the lowest period of design and construction project cycles Pictured below are the project schedules and the level of effort stated in Full-Time Equivalent employees (FTE). Authorization of positions by the Board is executed by adoption of the Annual Budget. LRT / HIGH CAPACITY TRANSIT PROJECT SCHEDULE * * * Projected Full-Time Equivalents FY 2010 through FY 2014 * * * Note: Staffing estimates are preliminary. Authorization of positions by the Board is executed by adoption of the Annual Budget. Five-Year Capital Program and Operating 39 June 2009

43 APPENDIX A BUDGET PROCESS s continuing goal is to provide the highest quality services to our member communities in the most cost effective manner. The budget process is a key piece of the strategy to achieve these results in a coordinated manner and to make fiscally responsible decisions that will ultimately produce a premier transit system in Maricopa County. s budget process serves two principal purposes. Within the Corporation, development of the budget provides a forum for joint planning of objectives and tasks, with managerial and board review of programs. It sets the expectations for performance in the coming year(s). For the Corporation s Members and partner agencies, the budget reports on the status of projects and services, detailing the agency s operational objectives, capital improvements, and funding plans. The annual budget is prepared on an accrual basis and adopted by the Board of Directors each fiscal year. With respect to Capital Budgets, project contingency accounting is used to control expenditures within available project funding limits. With respect to Operating Budgets, encumbrance accounting is not used and all appropriations lapse at the end of the year. staff positions are listed and approved as part of the annual budget process. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year. also develops a Five-Year Capital Program and Operating Forecast as part of the annual budget process. The five-year budget focuses on the capital improvements that are planned to occur within the planning horizon, and includes: projected costs of LRT capital expenses, projected amounts to be paid by each Member to, projected amounts to be paid directly for LRT expenses by each Member (for example, for acquiring rights-of-way), and projected revenues to be received from Federal funds or other funding sources. future staffing estimates are also provided. However, only adoption by the Board of the annual budget authorizes new staffing positions. The internal process is a collaborative and iterative one, with the agency s senior management providing strategic direction and critical review, managers and project managers preparing resource proposals, and financial staff (Including the Financial Working Group) providing feedback and technical support for the process. A review by the Rail Staff Working Group and Rail Management Committee will precede drafting of the proposed budget. Once the proposed annual budget and five-year capital plan have been published, the Board provides final review and adoption. Five-Year Capital Program and Operating 40 June 2009